Making your holiday money go further

By Tony Green - Thu 21st Jan 2010

I have been a regular visitor to Spain now for almost 6 years – sometimes visiting family 4 or 5 times a year. 5 Years ago, when it was possible to enjoy 1.45 Euros to the pound on even relatively small sums, the fees and charges applied to any currency exchange were not really a consideration, as overall the exchange rate was so good.

It is perhaps only over the last 18 Months that the exchange rate has plummeted, that I have begun to question how I can make the most of the money that I exchange.

Whilst there is very little that can be done about the actual rate of exchange, there are a number of things that can be done to keep a tight reign on the amount that is paid out on commissions, fees and other charges for spending your money in Spain.

Hopefully, the days of walking around your chosen foreign destination with a clutch of travelers cheques strapped to your waist and with a passport on hand at all times just incase you wanted to cash them, are a throwback to the 80’s. So many things have progressed leaps and bounds since then, so it is only fitting that the world of spending your money abroad should aswell.

For many people choosing to simply use your UK debit card or credit card over here in Spain to either pay for a meal, or buying things from a Supermarket is the easiest option – as is using the same card to make a cash withdrawal from an ATM. Whilst it may be convenient to do this it carries a number of disadvantages: You are not always aware of the exchange rate that you are buying your Euros at; There will be a commission to be paid at both the issuing and receiving bank (which can vary between 2.0 – 2.75%) and there will also be a cash handling fee to be applied (around 1.5% of the value of the transaction).

I have found 2 ways, and whilst they may not be suitable for everybody, it could be that one of them offers a solution for you in saving a few quid next time you travel to Spain:

1.) Banco Santander - Most people know that the Spanish Bank also owns the likes of the Abbey, Bradford & Bingley and also the Alliance & Leicester Banks in the UK. Maybe it’s been a long time coming, but recently the Bank has decided that all transactions for UK customers in Spain will not carry the above 2 fees. This is effective immediately for Abbey and B&B customers, and will come into operation towards the end of the year for A&L customers.

Note: In order to qualify for this service you must be paying a minimum of £1000 per month into your current account.

2.) Post Office Travel Money Card ( TMC ) - For many people as soon as you hear the words “Post Office” and “Money” in the same sentence, you can’t help thinking about old ladies queuing for their pension every week, and that simply isn’t the case.

Last year the Post Office issued a pre-paid currency card that you basically buy over the counter like you would a Phone card.

For example, if you were travelling to Spain, you would simply request a TMC in the Euro currency, load up the card with a minimum of £50 Sterling, and then off you go – able to make withdrawals at thousands of ATM machines throughout Europe. You can also add to the amount on your card over the phone if you find that funds are running low over the course of your holiday.

You can even use your card as a Debit card in places where Visa electron is accepted.

Note:There are a number of charges applicable when using the card depending on how the card is used – full details can be seen on the Post Office website.

Whilst cumulative charges of around 5% for each and every transaction may not seem like a big deal, over the course of a 2 week holiday it can very quickly add up – especially if you are a regular traveler.